Purchase Solution

Calculation of beta

Not what you're looking for?

Ask Custom Question

Pick at least one of the following companies and do the calculations that lead you to a result for beta, in a fashion similar to that which I used to compute 3M's beta in the Excel file included in this posting.

Here is the list of the thirty companies that make up the Dow Jones Industrial 30 (with their ticker code): 3M (MMM), Alcoa (AA), Altria Group (MO), American International Group (AIG), American Express (AXP), AT&T (T), Boeing (BA), Caterpillar (CAT), Citigroup (C), Coca-Cola (KO), E.I. du Pont de Nemours (DD), Exxon Mobil (XOM), General Electric (GE), General Motors (GM), Hewlett-Packard (HPQ), Home Depot (HD), Honeywell (HON), Intel (INTC), International Business Machines (IBM), JP Morgan Chase (JPM), Johnson and Johnson (JNJ), McDonald's Corporation (MCD), Merck & Co. (MRK), Microsoft Corp. (MSFT), Pfizer, Inc. (PFE), Procter & Gamble (PG), United Technologies (UTX), Verizon Communications (VZ), Wal-Mart Stores (WMT), and Walt Disney Co. Use the following address as an example of where you can go to get information on any of these
companies: http://www.nyse.com/about/listed/lcddata.html?ticker=DIS
When I collected the data for AA
using:http://www.nyse.com/about/listed/lcddata.html?ticker=AA, the charts and other information were readily accessible. That may not be the case at this time. You may want to go the company's website and look for the necessary information under 'Investor Relations' or a similar link.

http://finance.yahoo.com/q/hp?s=DIS (Disney) is also good site. It has adjusted stock price and dividend information for each of these companies. This assignment becomes more difficult for those companies that have had stock splits so I encourage you to keep it as simple as possible by using companies that have not had stock splits during the time of your analysis.

After you retrieve the data for at least one of these companies, go ahead and fill it in on the template file attached with this message and compute the beta for the company(ies). Follow my example of 3M to figure out how to compute beta.

Attachments
Purchase this Solution
Solution Summary

Calculations of beta are examined.

Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Introduction to Finance

This quiz test introductory finance topics.

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

IPOs

This Quiz is compiled of questions that pertain to IPOs (Initial Public Offerings)

View More Free Quizzes
Related BrainMass Solutions

  • Calculating beta from raw data using regression

    Download the data provided and calculate the measure of risk for this company (defined as Beta in the Capital Asset Pricing Model - CAPM) and explain why this calculation is a measure of risk.

  • Stock Analysis- Calculation of Beta in EXCEL

    Calculation of Beta: The value of Beta has been calculated for each stock using S&P 500 as the benchmark index. The calculation has been performed in EXCEL using the SLOPE formula.

  • Beta Calculation for IBM, Oracle & Philip Morris

    The questions relate to Capital Asset Pricing Exercise, Beta Calculation for IBM, Oracle & Philip Morris, required rate of return & measure of risk Note: this assignment does not have a word count requirement....you are simply responding to each question

  • Stock and Risk Free Rate

    The solution explains the step-by-step calculation of the price of the stock at the end of the year and the calculation of stock beta.

  • Calculatin of a stock's beta and required rate of return

    The solution is a step-by-step calculation of the stock's beta and the stock's required rate of return. MS Word document contains 130 words with detailed explanation of the effect of market risk premium on a stock's required rate of return.

  • Beta and required return calculation

    So a stock like CG with 2.4 beta should yield a required return of E = 0.06 + 0.0375(2.4) = 0.15. Beta and required return calculation are provided.

  • Required rate of return

    Using CAPM equation rA = rRF + (rM-rRF) beta 12% = 5% + (10%-5%) beta beta = (12%-5%)/(10%-5%) = 1.4 b. Using the CAPM equation with beta = 2 rA = 5% + (10%-5%) 2 rA= 15% The solution explains the calculation of required rate of return

  • Expected Return

    77124 Formula and Calculation for Expected Return Explain and work in Excel. Expected return on the market portfolio is 17.7 percent and risk free rate is 4.1 percent. Edward Jones has a beta of 1.6. Under CAPM A.

  • Calculation of Beta of the portfolio

    473754 Calculation of Beta of the portfolio You hold a portfolio of stocks consisting of the following: Stock Beta Current Value Blackwater Gas 0.5 $10,000 Tidy Tom's Cleaners

  • Portfolio of Stocks

    Critique the calculations and analysis of at least one colleague. If the calculation was in error, explain how to correct that calculation and please show all of your work.

View More Related Solutions